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The thrill of adventure is worth a few calculated risks. But sometimes whitewater rafts flip, bike frames snap, and wilderness guides lose the map. In a society where people are increasingly aggressive about putting a price tag on blame, an expensive new battleground is emerging one that involves the conflicting interests of lawyers, insurance companies, professional guides...and you.

LATE ON THE AFTERNOON of January 17, 2001, Pete Ro, a 35-year-old climber on vacation from his job as public affairs manager for the American Chamber of Commerce in Tokyo, decided to try one last climb up the frozen Uncompahgre Gorge in Ouray, Colorado. Ro was taking an advanced ice-climbing seminar from Jeff Lowe, 52, the sport's preeminent figure, at the famous Ouray Ice Park, a mile-long playground of frozen waterfalls and icy overhangs. As twilight filled the shadowy gorge and most of the 22-person class packed up, Ro elected to take on a challenging 140-foot pillar of chandelier ice called La Ventana.

Lucy Creamer, 31, a noted British climber also taking the class, offered to belay him. Ro, Creamer, and Lowe agreed that when Ro safely reached the top of the route, he would unhitch and wait to be picked up at a nearby parking area on the vehicle-accessible upper rim of the canyon, rather than rappel down. As Ro swung his ice tools, Lowe scrambled up a nearby gully to a point where he could see both the top and bottom of the route and, as he later stated in a police report, "aid in communication" between his two students.

Ro climbed La Ventana in good style but was slowed by its difficult upper pillar. As he neared the top and disappeared from Creamer's sight, she shouted to ask if he had finished. Reports conflict about Ro's reply. Lowe and one other climber believe they heard him say "Off belay!" Creamer and another climber heard "OK!" In either event, Ro seemed to be acknowledging that he had topped out, which Creamer took to mean she could release the safety rope. (Language barriers were not an issue here. Though Ro lived and worked in Japan, he was born and raised in California and English was his native tongue.)

Creamer unhitched the rope from her harness. From his vantage point, Lowe recognized the dangerous confusion and tried to warn both Creamer and Ro. But he was battling bronchitis that day, and apparently his hoarse voice didn't carry. "In a matter of a few seconds, Pete was taken off belay," Lowe told the police, "and shortly afterwards he inexplicably leaned back, as though he expected to be lowered."

George McEwan, a 39-year-old Scottish climber enrolled in Lowe's seminar, was in a position to see what occurred next. "I heard a noise, looked up, and saw what I took to be a jacket falling through the air," he told the police. "It wasn't till Pete hit the deck that I realized what had happened."

Ro fell about 135 feet, landed on his right side, and lost consciousness within five minutes. He was pronounced dead on the scene at 6:05 p.m.

NINE MONTHS LATER, RO'S WIDOW, 31-year-old Hiroko Ro, sued Lowe, Creamer, and San Juan Mountain Guides, the sponsor of Lowe's seminar, charging gross negligence and asking for general and special damages totaling $10 million. The case one of a handful of sizable outdoor liability claims that go to trial in the United States in a typical year will get its first hearing in late June, at the federal district court in Denver.

Ro v. San Juan Mountain Guides is fascinating on a couple of levels. Like any large liability suit, Hiroko Ro's courtroom claim could have immediate, tangible reverberations if she wins. Colorado climbers are worried about the future of the Ouray Ice Park, a unique, volunteer-run ice-climbing area that charges no fees and operates on the patchwork of U.S. Forest Service, county, city, and private land that is Uncompahgre Gorge. Though a multimillion-dollar verdict wouldn't force the park to close it's operated by Ouray County and is protected under the Colorado Recreational Use statute, which limits the park's liability to $400,000 in case of a lawsuit it could adversely affect the 35 guides who operate there.

"A favorable judgment for Hiroko Ro would make their insurance premiums skyrocket," says Ouray Ice Park president Erin Eddy, 33. "And if they go up, it might stop them from guiding in our park."

If Ro prevails, the impact of her suit could be felt well beyond Colorado's borders, in large part because the sheer size of the award she's seeking dwarfs any recent outdoor liability decisions, but also because it has arrived at a time when outdoor guides are grappling with an equally serious problem: their difficulty in obtaining affordable liability insurance at all.

People like Jeff Lowe and companies like San Juan Mountain Guides don't have $10 million to pay Hiroko Ro, so by necessity they carry liability insurance in the event of a future lawsuit. Both are covered by Colorado Western Insurance Company in Wheat Ridge. In normal times, when the economy is on an even keel, a company like Colorado Western is not averse to insuring high-risk activities because it's making money in two different ways.

The most familiar is the combined ratio, or "float" the profitable difference between premiums taken in and benefits paid out. Less obvious, but more important, is the financial power of the stock market. During the bull market of the 1990s, insurers lowered their premiums and were more eager to cover sketchy ventures in order to increase the amount of investment capital they hauled in. Even if they collected, say, $100 in premiums and paid out $105 in benefits, their investments were sometimes returning a booming 25 percent $25 on that $100 premium so they realized a 20 percent profit.

The events of September 11 helped put an end to all that, at least for the foreseeable future. An insurance industry already experiencing acid reflux with every drop of the Dow went on an all-Tums diet when the World Trade Center fell. After peaking at $336.3 billion in 1999, the industry saw its net worth fall to $289.6 billion by the end of 2001, according to the Insurance Information Institute. The insurers who backed the WTC spread their risk through a worldwide network of reinsurers, so nearly every insurance company will pay a little piece of the estimated $50 to $70 billion that add up to the largest property claim in history.

The upshot is a stingy insurance market, which immediately affects high-risk ventures. The last time outdoor companies encountered such a harsh climate was in the mid-1980s, when a similar mix of liability fright and stock-market droop threatened the health of the adventure industry. By 1986, a spate of liability-run-amok court judgments like the $650,000 paid to a suicidal man who sued the New York City Transit Authority because the subway train he jumped in front of failed to slow down had so spooked insurers that some companies couldn't find liability coverage at any price. Then came Black Tuesday October 19, 1987 when the stock market tanked, deepening the crisis.

"When times were good, a number of insurers came in offering cut-rate policies," recalls Exum Mountain Guides partner Peter Lev, 62. "When times got tough, they folded and left a lot of folks without insurance."

TIMES ARE TOUGH AGAIN. New York-based Frontier Insurance Company, known for its affordable outdoor liability coverage, was declared insolvent last October by the Superintendent of Insurance for New York State. TIG Insurance Group, another liability player based in Irving, Texas, has pulled back from the outdoor market almost entirely. (Asked to elaborate, a spokesperson for TIG would only say that the company is "currently changing the way we distribute our line.") Many other insurers who jumped into the adventure biz when times were good are now running for cover. "Up to 70 percent of the carriers once involved in outdoor recreation coverage are either no longer involved in it or are reducing their exposure," says one insurance executive who asked not to be named, but whose company focuses primarily on the outdoor industry.

The result? Escalating prices for coverage, when it's available at all. "If you've got an impeccable record, you can anticipate 15 to 30 percent increases in the coming year," says Michael Smith, a former vice-president of Marsh USA, the world's largest insurance broker. "There are clients who will see 100 percent increases or could be dropped outright."

Ask around, and you quickly find that both small outfitters and big-time guide services are feeling the pinch. Guides are reluctant to talk about insurance on the record, especially since so many operate on notoriously thin profit margins. But those willing to discuss the issue say it's been a brutal year for their bottom line. One independent rock-climbing guide in the Adirondacks recently saw his annual liability premium jump from $1,500 to $2,800. Garrison, New York-based Outward Bound USA, which guides more than 30,000 clients every year, just got hit with a 30 percent hike.

Jim Murton, who's run the Bingham, Maine-based rafting company North Country Rivers for 20 years, says he's also riding out a 30 percent bump in liability insurance this year. "I saw it coming last fall, but I didn't think it would be this bad," says Murton. "With our experience and safety record, I normally have some leverage to negotiate. But there was zero negotiating this year."

Another symbol of these rough times is the hard-luck case of Charlemont, Massachusetts-based Zoar Outdoor, one of the East Coast's biggest river-rafting, kayaking, and rock-climbing outfitters. When its original underwriter, Frontier Insurance, went bust, Zoar switched to TIG Insurance, only to have TIG downrated to such a degree that Zoar had to find another provider. Ultimately, Zoar's insurance bill went from $17,000 in 2000 to $27,000 in 2001, and company president Bruce Lessels expects another 25 percent rise this year.

Such costs will eventually trickle down to consumers as a price hike, but for many outfitters it's too late to adjust this season's rates. "We committed to our pricing for 2002 back in November," says North Country Rivers owner Murton. "Some outfitters may go with insurance add-ons, but we'll just eat the increase this year."

Beyond the financial squeeze, a few insurers are rewriting the rules, excluding employees and activities that they've covered for years. "The exclusions are starting to get a little overwhelming," says Jared Hopkinson, owner of Sawtooth Adventure Company, a Stanley, Idaho-based rafting, kayaking, and guide service. "This year our insurance company didn't want anybody under 25 driving our vehicles. Well, this is an industry where a lot of guides are in their twenties. It's making it more difficult for us to do business."

Is it possible to operate without insurance? Negative, say adventure-company owners. Most guide services in the West operate on federal land, and the U.S. Forest Service and National Park Service won't let anyone make a dime without adequate coverage. Those in the East often deal with private landowners and public utilities whose rules are just as strict. No policy, no play.

In the months ahead, more outfitters will be hit with sticker shock as their insurance policies come up for renewal. As exorbitant premiums eat into their revenues, prices will rise, customers may rethink those big trips they were planning, and the adventure industry will hit a few more bumps on the road to economic recovery. But the insurance crisis won't cripple the industry as long as insurers aren't suddenly tripped up by a big-ticket liability judgment. One for, say, $10 million.

THE PRECURSOR TO THE MODERN adventure lawsuit was a famous case that began on a warm summer day in 1929, when a man named James Murphy bought a ticket for the Flopper, an attraction at Coney Island's legendary Steeplechase Park. The ride was a herky-jerky moving sidewalk that threw its riders like a bucking bronco. Murphy hopped aboard, got thrown, cracked his kneecap, and sued.

The issue went before future Supreme Court Justice Benjamin Cardozo, then a judge in the New York State Court of Appeals, who rejected Murphy's claim so roundly that Murphy v. Steeplechase Amusement Co., Inc. became a standard case study in law school. Applying the English common-law principle of volenti non fit injuria he who consents cannot be injured Cardozo ruled that if you buy a ticket for the Flopper, you can't collect damages when it flops you. "The timorous," he concluded, "may stay at home."

That phrase set the tone for such cases until February 10, 1974, when James Sunday took a turn down the beginner's slope at Vermont's Stratton Mountain Resort. Sunday caught his ski on a hidden clump of brush and fell hard: He went down a 20-year-old novice skier, and came up a quadriplegic. Sunday sued, claiming negligence, and was awarded $1.5 million, sending a wave of panic through the ski industry.

The verdict in Sunday v. Stratton Corp. was a watershed because it was the first major reversal of the Steeplechase standard and it came at a time when outdoor recreation was exploding in popularity, drawing participants who looked at risk in new ways. In the fifties and sixties, most skiers were hardy outdoorspeople accustomed to ungroomed hills and frequent injury. The sport's fashionable boom in the seventies attracted people who were inexperienced, less adventurous, and more likely to sue over a broken leg. The courts decided they needed some level of protection. "The timorous no longer need stay at home," the Supreme Court of Vermont noted in its 1978 ruling on Sunday. "There is concerted effort to attract their patronage."

To survive the Sunday decision, outdoor-industry leaders lobbied lawmakers in recreation-dependent states like Colorado, Wyoming, and Vermont to pass recreation safety acts. The new laws held outdoor enthusiasts responsible for the inherent risks of their sports, weakening the effect of Sunday and strengthening the assumption-of-risk idea that had evolved from Murphy v. Steeplechase.

Similar laws are on the books today in 26 states, but recreation safety acts weren't enough to protect outdoor businesses against future Sunday claims. Ski-resort owners, river runners, mountain guides, and wilderness educators had to change the very language they spoke. Still, it was a subtle change. The Sunday decision didn't require that businesses provide perfect safety for all outdoor activities. What it did require was that they be very careful not to put anything in writing that promised safety.

Charles R. "Reb" Gregg, a 66-year-old Houston attorney who is considered the dean of the outdoor bar, was one of the first lawyers to see the danger in promising safety. Gregg has represented the National Outdoor Leadership School since the 1970s and coedits the Outdoor Education & Recreation Law Quarterly. He is famous in risk management circles that is, those insurers, lawyers, and safety managers who monitor the outdoor industry with an eye toward keeping employees and clients injury-free for his mock-trial cross-examinations. In these, he plays the part of an attorney for an injured client, puts an adventure company CEO on the stand, and blows holes in the language of the company's brochures.

"I'm reading here where it says, 'Safety is our number-one priority,'" he'll say. "This is your brochure, is it not?"

Yes, says the CEO.

"And later in the same document you talk about clients coming to this program 'to take risks.' Is that right?"

Yes again.

"Now, my dictionary defines safety as" here Gregg holds up Merriam-Webster's Collegiate for effect "'free from harm or risk.' I wonder if you'd choose one or the other, because you can't have both."

Whatever choice the CEO makes, he loses. Because Gregg's follow-up goes like this: "Then you didn't tell your client the truth, did you?"

The word safe, Gregg explains, misrepresents what an outdoor experience should be. "We don't avoid the risk of harm, we embrace it," he says, speaking of the outdoor adventure industry as a whole. "So what we had to do was eliminate the term 'safety.'"

In the wake of the Sunday decision, outfitters expunged promises of safety from their brochures and liability waivers, and replaced them with warnings about the risks their clients would face on their excursions. The blunter and more graphic the information, the better.

"Clients often hear what they want to hear," says Preston Cline, 35, a wilderness risk consultant and director of Adventure Incorporated, a Gloucester, Massachusetts-based company that works with outfitters and experiential education groups. "An organization's brochure may have vague statements about how you can get yourself killed doing this. But what a client reads is: Ooh, how exciting, how challenging. So that organization has to be more and more abrupt about saying: 'Look, these are all the ways you really could die doing this program.'"

That shift from a "sign here" formality to a candid briefing on risk has made the liability release much more difficult to dismiss in court. "I still hear people say a release isn't worth the paper it's written on," says Gregg. "That just isn't true. A well-crafted release will almost always hold up."

BEFORE HE STRAPPED ON HIS crampons, Pete Ro signed two liability waivers releasing Jeff Lowe and San Juan Mountain Guides from responsibility if he were injured or killed during the seminar. How, then, can his widow sue? Because as powerful as they are, liability waivers cannot (and should not) prevent people from seeking relief when their guides have behaved with gross negligence, which the law defines as "willful and wanton" actions that indicate a high degree of recklessness.

Gross negligence is a pretty high bar to clear, so the first move by Ro's lawyer has been to try to get the liability waivers thrown out of court, in which case he'll only have to prove that Lowe acted with simple negligence that is, the failure to use ordinary care. (If negligence is overlooking a client's frayed harness, gross negligence is getting drunk and waving a loaded .44 around the campfire.) To do that, he'll likely take direct aim at the very nature of release forms.

These forms were generally toothless until the early 1980s, when the words "fully cognizant" turned things around. The more a client knew about the dangers he faced going in, the better the release fared in court. "I get awful picky when I draw up releases," says Jim McCarthy, 69, a Wyoming attorney and former president of the American Alpine Club who often represents guides and guide services. "I want clients to initial the four or five key paragraphs so later when they say, 'Oh, they stuck the form under my nose but I didn't read it,' you've got their initials there in six different places."

Did Pete Ro correctly sign his release? Jeff Lowe's attorney, Denver lawyer Monty Barnett, thinks so. Ro signed the first release two months before the seminar and the second the day before he died. (On Barnett's advice, Lowe declined to comment for this article.) Hiroko Ro's attorney, San Francisco lawyer Walter Walker, disagrees. In pretrial documents, Walker describes the two releases as "a mishmash of exonerations that are clear to no one" and claims that Ro signed the second release under duress. Since he had spent a lot of money and time to get to the ice-climbing school, the argument goes, he basically had to sign whatever was put in front of him to experience his vacation.

"San Juan Mountain Guides [had] Mr. Ro in a box when he arrived in Ouray," Walker argues in court papers. "Where else was he, a resident of Japan, going to go? How was he going to find another masters seminar?"

If the release holds, Walker will be forced to press on with the difficult task of proving that Lowe one of the world's most respected ice-climbers behaved with gross negligence. He claims that Lowe crossed this line when he assumed the role of go-between for Ro and Lucy Creamer. The reason? Lowe's bronchitis impeded his ability to help when he saw trouble. "Lowe knowingly and voluntarily chose to take on this safety role in his incapacitated condition," asserts Walker. This decision, he claims, constitutes "willful and wanton negligence."

Barnett scoffs at this argument. "The allegation about Jeff Lowe's voice is a red herring," he counters. "That had nothing to do with the accident, period. There is absolutely no negligence, even if we didn't have a release."

Lowe, however, may also be a victim of bad timing. In recent years two equal and opposing ideas have percolated through separate state court systems. One call it the Wyoming Principle, after the state whose judges have upheld it holds that instructor misjudgment is part of the inherent risk of any outdoor activity. The other call it the California Principle, because it's gathering steam in that trend-setting state maintains that an instructor bears a heightened duty to protect his students from harm. Those ideas came into direct conflict the moment Pete Ro died.

Reb Gregg, who is not involved in the Ro lawsuit but represents clients who might be affected by it, champions the Wyoming Principle. "We're arguing for cutting the instructor a little slack," says Gregg. "One of the toughest concepts for people to get their arms around is the difficulty of making just the right decision in a wilderness environment. A jury will inevitably search for the right response. But there's a gap between the drop-dead right answer and a reasonable answer. What I'm saying is that a decision may ultimately prove to be wrong, but that doesn't mean it was unreasonable. And being wrong is not the same as being careless or negligent."

Still, recent liability cases in California have established that a coach or instructor may have a heightened responsibility when it comes to risk. In one case, a high school swimmer who was paralyzed when he followed his coach's instructions to dive into the shallow end of a pool won $11.5 million from the school district.

"A coach has a heightened responsibility when it comes to those risks," says Walker. "We feel that's the case with Jeff Lowe. If you enhance the natural risk of a physical activity, you can be responsible for that."

THE CRUX OF THE PROBLEM IS THIS: foreknowledge. Successful risk management requires not just the best gear and guiding smarts but a clientele that has been briefed to the point of information overload. You can never be certain about an outcome but you can be fully prepared.

"You have to understand the risks in order to make the best safety decisions," says Daryl Miller, 58, head of mountaineering operations at Denali National Park. In 1995, Miller and his rangers began bombarding mountaineers with facts about the risks they faced on Mount McKinley; gradually a risk management system was put in place. Permit applicants now receive a brochure laying out the dangers in eight languages. Once in Talkeetna, the stepping-off point for all McKinley expeditions, climbers attend a mandatory preclimb PowerPoint briefing. Rangers fresh off the hill give them route conditions, weather and avalanche forecasts, and glacier information and they hammer home the point that there is no right of rescue.

The results have been dramatic. On a mountain notorious for attracting hairball climbers and atrocious weather, accidents have declined every year since 1995. McKinley hasn't had a climbing fatality since 1998.

Nobody likes to give the death talk. It takes guts to harsh the pretrip high, to tell a roomful of people who've signed $5,000 checks that, if something goes wrong, they could die a slow, painful death in the middle of nowhere. But as Miller has found out, it's the most honest advice a guide can give a client. "One of the things I tell all climbers is that people who fail to recognize and respect the elements will lose their life," he says. "The wilderness is unforgiving. It doesn't care about your résumé."

Lawsuits like Sunday v. Stratton Corp. and Ro v. San Juan Mountain Guides may work in a similar way to actually deepen the outdoor experience in America. By making us acknowledge the risks we can expect to encounter, they force us to reckon with the basic question of outdoor adventure: What are we willing to risk and what do we hope to gain?

"The real art of risk management is knowing how to have that candid exchange without freaking out both sides," says risk consultant Preston Cline. "The point is to protect the clients by not lying to them. And if you tell them it's safe, you're lying to them."